Taiwan shipping firm seeks US bankruptcy protection

Taiwan Marine Transportation (TMT) said that it has filed for bankruptcy protection with the Federal Court in Houston in a bid to prevent its creditors from taking its vessels registered overseas into custody.
TMT said the move to seek protection under Chapter 11 of the U.S. Bankruptcy Code is aimed at allowing the company to financially restructure itself without interruption from its creditors, while it is determined to negotiate with its creditors on how to get through its financial crisis.
Although TMT did not immediately disclose its debt position, local media reported earlier this month that the shipper has debts of US$800 million.
According to the media reports, Taiwan's First Commercial Bank is the company's biggest creditor, with lending reaching US$120 million, while Mega International commercial Bank, another major bank in Taiwan, is the second-largest, with outstanding loans of US$96 million to the shipper.
The Financial Supervisory Commission, Taiwan's top financial watchdog, said in a statement released in late May that largely due to the loans extended to TMT, the total overdue loans of the local banking system as of the end of April had risen by NT$5.7 billion (US$188 million) from the previous month to NT$100 billion.
In a statement, TMT Chairman Nobu Su said the financial difficulties the company faces result from a slowdown in the global economy in recent years. He said the company had no choice but to seek restructuring with court assistance.
TMT said local creditor banks have already seized some of the vessels it had pledged as collateral, which has affected the company's operations, forcing it to seek bankruptcy protection in the U.S., which the company said has better governance over corporate reorganization.
Su said he assumes full responsibility for the problems TMT has encountered.
“I want my ships on the high seas earning money to pay off my loans, but bank actions have contributed to delaying a successful restructuring of the shipping side of the business,” Su said in the statement.
The shipper said that with the global economy showing signs of recovery, TMT has confidence that shipping demand will revive on expanding trade activity and that the shipper will be able to resolve its crisis.
Source: CNA